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Company formation basics

Why should I set up as a LTD company?

  • Once you earn over 50,270K in profit it’s recommended that you set up as a LTD for tax efficiency.
  • Limited companies are incorporated as independent legal entities in law. This means they are not you, and if they hit financial difficulty or are sued, you are individually protected. Although, most lenders will still ask you to personally guarantee loans.
  • If you plan to sell the business or pass on it’s easier to do this under a LTD structure.
  • Limited companies tend to be viewed as more credible or reputable as information is available at Companies House. This can help when it comes to obtaining credit and winning contracts with larger businesses.
  • Typically, if your clients are other businesses a LTD structure is best.

If you’re unsure which company structure is best for your business you can get your bespoke company start up guide here

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